Ollie's Bargain Outlet topped Q1 earnings estimates and raised full-year guidance early Wednesday, with top- and bottom-line growth accelerating. The closeout retailer could be a winner as consumers downshift, but investors, after pushing OLLI stock close to a buy point ahead of earnings, haven't moved off the fence. OLLI stock fell slightly Wednesday.
Ollie's CEO John Swygert said in a statement that its customer base now includes more higher-income and younger-age shoppers. The deal flow for the closeout brand merchandise key to Ollie's model "remains robust," he said.
Ollie's Earnings
Ollie's earnings per share surged 145% vs. a year earlier to 49 cents, a penny above forecasts, accelerating from 22% and 9% in the prior two quarters. Sales grew 12.9% to $459.15 million, an acceleration from 10% and 9% growth the prior two quarters. Analysts had expected 11% growth.
Same-store sales rose 4.5%, after the prior year's 17.3% decrease. Plus, Ollie's store count rose by 8, or 8.4%.
Ollie's boosted its full-year EPS guidance by 7 cents to a range of $2.56 to $2.65. Analysts were looking for $2.56. The company boosted comparable-store sales guidance to a range of 2%-2.8% from 1%-2%.
OLLI Stock
OLLI stock fell 1.5% to 61.06, just below the 50-day line after some swings up and down.
On Tuesday, OLLI stock crested its 50-day moving average, rising 4.5% to 62.01. It was the third straight gain in above-average volume. OLLI stock appeared to be closing in on a cup-with-handle buy point above 68.16. An early entry would be possible, if OLLI can stay above Tuesday's high of 62.17 and proceed to break the trend line sloping down from its 68.16 handle high.
Wednesday's volatility highlights the rationale for IBD's advice to avoid new buys ahead of earnings, though an options strategy offers an alternative.
